An idea for India

We speak, rightly, of India regaining its place in the world economy and recouping its historic share of global trade. There’s another momentous fact we need to recognize: We have it now in our capacity to end poverty in our country, to address basic requirements of our citizen’s welfare, and to reduce their exposure to new risks. We have it in our power, and haven’t done it—and we need to. The imperative is not just a moral one, concerning the obligation we have to the social welfare of our poor. It’s a political imperative: necessary to keep our nation holding together during this bewildering transition from poor country to significant world power.

Collective voice: Women oppose government’s acquisition of their land during a protest in New Delhi. Saurabh Das/AP

The current state brings back B.R. Ambedkar’s ominous warning to the Constituent Assembly: that our political democracy would be “blown up" if efforts to establish a sense of social citizenship were not pursued. Like Jawaharlal Nehru, he saw the urgency of creating a social democracy that would persuade all Indians that they belonged in a collective project of common development.

More than half a century later, the measures of India’s uneven growth are well-known. The wide disparities in the growth rates and trajectories of India’s leading and laggard states; between India’s booming cities, large and smaller, and the vast rural hinterland—leading more and more to move into the cities, yet bringing with them few relevant skills to benefit from opportunities that may be found there; the staggering social inequalities in a country that boasts growing numbers of billionaires (in proportion to GDP, only Russia has more billionaires) and hundreds of millions whose daily lives hover in poverty; the many social groups who remain subject to discrimination of various sorts.

We need, as a nation, to take responsibility for this predicament—we can no longer continue to blame it on the failures of past policies, or inevitabilities of global constraints.

For these disparities, which are deepening lines of future potential conflict, are proliferating within a society that—in ways quite different from the other new growth economies—is already distinctively diverse and vast in scale. In Brazil, for all its racial and religious diversity, they still all speak a single language; in China, the state remains in close control of cultural and social identities (unlike India), and can impose its own national idea; South Africa’s internal diversity does in some ways parallel India—but in scale it is no larger than an average Indian state.

Seen purely from the point of view of sustaining a shared idea of the nation, of a sense of social citizenship, we should be troubled by the overall effects of our economic growth path. Especially troubled, if we factor into our disparate and fragmented economic reality the fact of our demographic profile: young, becoming younger for some years to come. In the next five years, we are going to see the entry of more than 60 million young Indians into the workforce—with most of them likely to find such work as they can in the informal, unorganized sector. India’s young might temporarily place their faith in a kind of market nationalism: but it’s not a sustainable faith. An increasingly young nation, we are also less able to give the young reasons to believe in a positive idea of the Indian nation.

As we consider what kind of social democracy India might create to address the mounting strains on India’s unity, we should be aware of what has already been tried in the West and elsewhere. And we need to be just as mindful that those lessons might be limited for a country of India’s scale and diversity—and with its huge informal economy.

Take the rightfully acclaimed Earned Income Tax Credit in the US which offers incentives to the poor to seek work and provides a redistribution of income at tax time. It’s done a great deal in the US to bring the underground, informal economy to the surface, and to materially benefit poor workers. However it is inapplicable as a widespread equalizing instrument in a society that has India’s rates of unemployment. Similarly, the European concern—widespread in this new century—about citizens becoming “dependent" on welfare benefits presupposes a state that actually provides a wide range of welfare: for instance, housing and healthcare to all citizens. The existing social safety net in places like the UK is something that Indians can only dream about.

Still, when we speak today of two “countries", Bharat and India, we are in fact invoking an old trope, that can be found in all democracies during periods of economic growth and social change (think of Benjamin Disraeli’s “two nations" in 19th century England). And we know that one method, resorted to in European history, to try to reintegrate divided societies is to urge unity against an external, or sometimes also an internal, enemy—to foster a coercive, aggressive nationalism. Indeed, we have our own political leaders and parties who would have us pursue such methods. To avoid that destructive path, we’ll need a positive definition of the nation—composed of citizens rather than opposed to enemies.

On government duty

Aside from the politics of reservations—increasingly hard to see as any kind of measure aimed at social justice—there have recently been two sorts of responses to social inequalities.

The politics of poverty: (above) A crowd gathers for a political rally in Mumbai (Dinodia); and villagers trek long distances to find drinking water in Bihar (Priyanka Parashar/Mint).

But the beast tasked with performing this alchemy remains the state, government of India (GoI)—the same beloved “On Government Duty" crew. And it doesn’t take long to see that there isn’t all that much reason to be enthused by the Indian state spending more resources on building, ostensibly, schools and hospitals— proliferating unmanned structures, the domain of goats, pigeons, and the occasional determined children who wait in hopeless hope for their teacher to turn up.

A second approach urges more precise targeting of policies towards specific groups judged subject to discrimination and deprivation. To accomplish this, one needs much more detailed information than we have about specific social groups, including sub-groups within castes, so that we can identify the differences in life chances that are internal to caste groups. Bring on the “Caste Census". It’s an approach that relies on being able to devise a transparent “calculus of compensation"—which could be acceptable to all, but which is always likely to appear discretionary and therefore subject to intense political contest and practical bending.

It strikes me as heavily paternalistic. It assumes that an expert elite possesses insight not just into people’s needs, but also how they should be provided for. More significantly, the targeted approach assumes the ideal conditions of an honest, effective, accountable state—and the possibility of rational evidence-based debate. I long for the day when this could happen. In practice, current government policies designed to alleviate poverty by targeting or improving welfare have often strengthened networks of corruption, and diverted benefits to elites—or to those who enjoy their patronage.

Most seriously from the point of view of a cohesive national idea, the current policies of targeting and reservations, with their politicized and discretionary qualifying criteria effectively serve to divide the poor—and often to set them against one another.

Citizens’ market

It’s time therefore to consider other lines of approach: ideas that take seriously the need for a universalist form of social provision, but which are less dependent in the short term on the assumption of a functioning state.

To create universal social provision harks back to Nehru and Ambedkar. And indeed, the starting point of an Indian social democracy has to be a reinvention of the basic ethos of our Constitution: a commitment to constitutional universalism—a conception of citizenship that sees Indians as members in a common project. That idea has been blurred and hazed by virtually every development in our history since the introduction of universal suffrage—from our system of civil law to our legislation for social and economic protections and advancement: all of which have been about the recognition of difference.

Count on me: (clockwise from far left) Residents being enrolled at the first UID test site in Kibbanahalli village (Hemant Mishra/Mint), Karnataka; BJP leader L.K. Advani leaves in a helicopter after an election meeting for the Bihar assembly polls in Rajgir (PTI); and an old woman holds up her ID as voters wait to cast their votes at a polling station at Hilsa in Nalanda, Bihar (PTI).

And now we possess some of the means that might help articulate such a definition. The first steps will be limited, minimal—but they can help to set a learning process under way, which could see the creation of small, cumulative “citizenship" effects.

As we develop a more universalist conception of social welfare, we should build on one of our success stories: democracy, and the conduct of elections. This is one domain in which the Indian state has shown organizational competence in delivering a public good. The Election Commission, which commemorates its 60th anniversary this year, is a model Indian institution: and it has used technology—the voter ID card—to enable Indians to vote. On the ground, enacted democracy is far from perfect: but rampant electoral corruption is today more the exception than the rule. This simple practice of voting has helped hundreds of millions of Indians, rich and poor, identify themselves with a common project—to feel themselves to be political citizens. After two decades and more of growth, it’s time to ask: Is there something we could do in the social and economic realm that might provide a similar common field on which all Indians stand together?

The idea of an unconditional annual cash payment (often called universal basic income) to every citizen has been in the air for some time, but hasn’t much figured in Indian debates. It has returned to discussion in the economies of the wealthy industrial West since the late 1980s: as precisely a way of addressing the problem of an emerging dual economy—divided not between capitalists and workers, but between those with formal, “proper" jobs and those engaged in informal work.

To even raise this as a possibility—an apparent luxury of the prosperous West—might appear preposterous in the Indian context. But I don’t think it is. For an economy like ours, that has the second highest growth rate in the world, and the largest poor citizenry in the world, in fact it seems exactly appropriate to think about how some of the benefits of that growth might be directed to reaching the wider populace—to give them a palpable sense of inclusion in the Indian nation.

What I have in mind can be thought of as a dividend on our growth: and let’s therefore call it, precisely, a Citizen’s Growth Dividend. The overall amount set aside to fund this should be a specified percentage of India’s GDP—thereby immediately establishing a connection between the size and growth of India’s economy and some sharing of that with all Indian citizens. We might start, for instance, with a figure of 2.5% of GDP (the same amount we spend on the defence budget) as set aside to fund payments of the Citizen’s Growth Dividend—an amount that the economist Pranab Bardhan has estimated would cover an annual payment of ₹ 5,000 to every household.

My reasons to argue for this are above all political. But, since social policy in every nation thrives on over-promise, let’s be clear, straightaway, what such a proposed Citizen’s Growth Dividend won’t be able to do. It won’t make our society equal, it won’t make it just; it won’t make poor people grateful to their government. Look at the streets of Paris last month—people get used to what they get. Nor can we think of this as a populist, Chavez-style buyout (anyone who thinks it might be quite mistakes the shrewdness of the Indian poor). Nor is it a Nixonian payment to an unruly underclass threatening to riot. Universal payment in the form of a Citizen’s Growth Dividend may help as an argument against Maoists, but it won’t be a reliable inoculation against such frustration and anger.

This idea is aimed at doing something else—something crucial for the future of Indian governance. In establishing such a dividend, we are in effect saying, shamefacedly: our state cannot yet give you what you really need, we cannot deliver the schools or hospitals, the functioning social infrastructure or the equal life chances that we recognize that you as citizens should have. But here’s a stop-gap offer. It’s the political equivalent of the signs one always sees in public spaces: “Please Bear with Us as We Make Improvements". It’s a first transitional step in an effort to build an Indian social democracy on a universal basis.

Unlike the divisive effects of current social welfare policies, the payment of a Citizen’s Growth Dividend would be a direct, simple and instantaneous transaction with all citizens. It would be paid to Mukesh Ambani—and to the beggar outside his gates: bringing two worlds into a shared connection, and (who knows) it might even induce some Gandhian embarrassment among some of us. It would offer a basis on which to unite all citizens in relation to the state, and implant among all a sense that the state does owe us something as citizens—and that it can and will deliver this. This is likely to be an uncomfortable political proposition for the state. It would create something like a market of citizens, who possessed a certain minimal economic power—generating a demand for responsiveness from the state.

As citizens come to hold Indian governments and the state to account for their dividend, a more general demand for accountability from below might swell. I hope this would be the case over time. But in the short term, the dividend would give people across the country some sense that the state actually recognized them, their existence—just as the vote has done. It would add a sense of social and economic citizenship to the political citizenship embodied by the vote.

A Citizen’s Growth Dividend might bring real economic benefits to the nation. It would incrementally boost economic demand especially in the countryside, and so direct producers towards meeting needs there. And, given how difficult politically it will be for an economy of India’s scale to replicate the Chinese growth model, with its globally imbalancing effects, the need for internal demand to sustain growth becomes all the more imperative.

Moreover, we now have in our grasp the technology that would make administering a growth dividend possible, in the form of the Unique Identification (UI) card, the Aadhar programme. Surrounding that programme there are ethical issues that need debate; but one thing the UI card can enable is a direct point of access between every Indian citizen and the state (just as the ballot box does). The UI number is envisaged as a platform for further social policy initiatives—and its uptake is essential for such policies to be developed. If it becomes linked to a universal payment, there would be a huge incentive for people to register for UID.

I think that it would be practicable; and it should also be possible to generate the political support for such a policy. We’ll need to find ways in years ahead, to shift from a patronage state, based on subsidies for particular groups, to one based on universal basic provision for all citizens. This is a difficult battle, one that our political leaders have shown little willingness to engage. But, they might feel more confident armed with a proposal for a universal payment, a Citizen’s Growth Dividend of the kind I’m suggesting. Meanwhile, it will be harder for those wishing to protect their subsidies to do so against a policy that provides something to all Indians. In that sense, the idea could be a potentially winning electoral platform to a party.

But ultimately, I reiterate that I am interested in the political potentials of this idea. It is far from an ideal solution: not a capstone of social policy, but a building block that would give people a sense of belonging to something larger. Just as elections do not render our governments benign, let alone accountable, a universal basic income payment of a Citizen’s Growth Dividend would hardly yield a more equal society. Yet it would, in addition to potential economic benefits, signal to all Indians, in a time of profound transition, that they have an enduring stake in our nation, in its wealth—in fact, a claim on it. And it would remind governments that the idea of India is composed not of constituencies, but of citizens.

Sunil Khilnani is the author of The Idea of India and is currently working on a new book, India in Search of Wealth and Power. Write to him at publiceye@livemint.com